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Fair point, it is interesting how we can both read the same thing but have interpreted it slightly differently - clearly myself incorrectly. I had emailed them to ask about this and got directed to the 'in the event' sentence - I took this to mean that they may pay it......
My recollection of the wording was that the merger would happen in Q1, and something like "in the event" that it was after the Redde divi then the divi would be payable, it certainly read as an exception that it would be payable rather than the expectation. I would have seen it as a bonus (to a crappy deal) rather than what I planned. But then communication hasn't been wonderful at any point here IMHO
My understanding was that they said by end of Q1 - rather than specifically pre ex-divi date (6th March). As NTG holders have recently received their divis and the directors of Redde hold a lot of shares I had assumed that they would time the merger to be after the Redde ex div date (two weeks later than that proposed) .
Not sure why it's not what you expected. My memory of the prospectus was that it was pretty clearly planned to be completed by the redde divi date and the divi was only paid IF there was a delay.
It looks like the merger date is the 21st Feb - so no divi ….
Not what I was expecting
Only millennium raising its short
If this pays a five or six pence divi plus if NTG keeps rising this could be 115 before merger date nice
It looks like some of the shorts in NTG are reducing.
Will they delist on the ex-div date? It would seem a way of paying the divi (5.5%) with, possibly, less impact on the share price.
Looking at the number of shares held by the directors I think that the effective date may well be after the 6th March....
Any guesses as to when this will be? if it is after the 6th March then they will pay the 5.5p divi.
I assume if Redde was to go ex div then NTG would also be expected go down respectively?
After pondering this, as NTG goes down 0.54 to Redde going down 0.46 it would make sense to short NTG rather than Redde
Is it because link is consistently selling down Redd? Redd and NTG act as a pair now so it does not matter which you short although there must be a reason for doing it this way.
No idea why REDDE shares are falling other than Market doesn't like the idea of the merger? or suspects some nasties in either NTG or Redde accounts/trading? but no red flags in either companies most recent updates.
However I have noticed that the shorts in NTG are growing ( there are no shorts above 0.5% in REDDE) one of the NTG shorters increased from 0.5 to 1.1% on the 20th Jan.
Bear
Thanks for the clarification - sounds logical.
IIRC, the prospectus assumed that the merger would be done prior to the next Redde divi, but if it happened after the next Redde divi is due (early March declaration), then it would be paid. I *don't* remember if this would affect the # of NTG shares that each REDD **************d for or not - it will be somewhere in the prospectus. I *think* that the NTG divi was factored into the exchange rates of the shares.
Although Northgate Redde hope to have the merger tied up this quarter I assume Redde will
1) Still report interims around 27/2
2) Pay an interim dividend
If no interim divi we could have some time to wait before the first combined payout. I noticed Northgate shareholders benefitted from a dividend during merger discussions will Redde be treated the same way ?
At last night's closing prices, the Redd sp of 107.2 divided by 0.3669 (number of ntg shares in exchange) comes to about 292. The nth price was about 297, so still a slight premium to the Redd price (long term value is another matter). Technically there's maybe scope to arbitrage the 2, short ntg and buy Redd with the proceeds if the transaction costs weren't too high and you could find the volume.
If Northgate share price goes down and Redde sp goes up our share s that we are getting in exchange are going to be worth less???
The big difference is that the board of Centamin are rejecting the offer to merge but the Redde board are fully supportive of the merger with Northgate. They recommend acceptance. It would be quite interesting if the Redde board have misjudged the shareholders and it gets rejected!
I think Redde should have issued a statement similar to the one Centamin issued today.. Our cash flow and divi combining with Northgate debt means we should be valued higher than 46%. I see some business benefits but I wonder if the Redde board members salaries will be restricted to 46% value of combined board etc..
thanks
talking to myself new name reddenorthgate
will there be a change of name ?.
Not sure when the merged divi would be due, but it will be twice covered by earnings. Merged divi would have to be a few % lower than Redde's current 10.5%. Share price moves yesterday have rebalanced market caps for both companies, which acknowledged a (very low IMO) 10-11% undervaluation of Redde shares. Redde shareholders will hold 46% of combined company. After Fridays price moves, Redde cap now £340million, Northgate £419million. £340mill is 45% of combined £759mill.
What happens now? I'm a redd shareholder and don't understand why Redd shares went up and Northgates down both by significant amounts. Can anybody advise when the new shares will go live and at what price. Was holding Redd for its divi. Does anybody know when the next divi date is for the combined group? Thanks